A recent article in the Financial Times shows that luxury retailers are failing to harness the potential of the virtual world. Many luxury brands still prove poor at offering personalised custom service online—a keystone of what makes their brand high-end instores. Are these brands underestimating how new technology and social networking tools can help build personal relationships and loyalty between visitors and the brand across global markets? A missed opportunity for global connectivity or protection of the luxury brand?

Therein lies the tension inherent in an online outlet: how do you expand your brand to mass consumers while retaining high-value buyers? For high-end luxury brands known for exclusivity, does an online presence make a brand too accessible to everyday Joe? The fear of devaluing one’s brand through a strong web presence has slowed many exclusive names from entering the virtual marketplace.

Perhaps, an understanding of the classic differences between Thetas and Lambdas could help marketers understand how new communication outlets like the web can tap into luxury consumer mindsets without losing hte personal attention expected in luxury marketing. By raising awareness of the brand online, marketers can draw in Thetas by creating a virtual community for various peer groups. On the other hand, by maintaining a high-end value of personal service and localised responsiveness, Lambdas can retain a sense of exclusive individuality through the luxury brand. In turn, the web can be embraced, rather than feared, by luxury retailers.

Social networking sites like Facebook and MySpace haven’t traditionally been associated with luxury brands–largely because they’re mainly used by young people who aren’t able to afford expensive luxury goods. However, two complementary factors–increasing numbers of users with discretionary income on the sites and an increasing desire to ‘hook’ young people early on a brand–are changing some luxury brands’ online strategies. Case in point: Cartier. The company recently created a page on MySpace for its new ‘Love by Cartier’ collection. The page, more tastefully done than most user MySpace pages, shows audio, video and photos related to ‘Love by Cartier.’ As of this posting, the campaign has 3929 friends, including celebrities like Lou Reed and Sting.

I wonder about the value of these sorts of pages to the brand. From the IHT:

Ben Hourahine, futures editor at the London branch of the ad agency Leo Burnett, said the use of social networks was appropriate at a time when consumer attitudes about luxury were changing. In a recent survey of U.S. consumers by the agency, only 7 percent said they thought “luxury” meant being part of an exclusive club.

“Luxury brands in the past had this unattainable aspect to them,” he said. “Now they realize they need to connect and communicate with people.”

I’m skeptical because I’m not so sure the MySpace audience matches up well with the Cartier’s target audience. Given the quality of some of the interactions on the page (THX 4 THE FRIENDSHIP!! ALL THE BEST! GREETZ FROM HAMBURG, RALF), I wonder if the positive association these users gain with the brand is worth the tarnishing they’re giving the brand by being so, well, MySpace.